In this issue:

U.S. Extends Military Presence in Philippines—Indefinitely

Indonesia Reopens Strategic Economic Projects

Megawati Tells Military To Crack Down on Separatists

Laos: World Bank Stops Crucial Hydroelectric Project

UN Still Preventing Cambodia Trial of Khmer Rouge

India Cabinet Shuffle Could Change Financial Direction

From the Vol.1,No.18 issue of Electronic Intelligence Weekly
Asia News Digest

U.S. Extends Military Presence in Philippines—Indefinitely

Concerns that the U.S. would use military exercises in the Philippines to establish a permanent presence under the banner of the war on terrorism have been confirmed. In a meeting in Hawaii over the June 30 weekend between Philippine Chief of Staff Roy Cimatu and U.S. Pacific Commander Adm. Thomas Fargo, it was agreed that the Balikatan "exercises" which end July 1, will continue in other forms, extending through at least 2003.

President Gloria Macapagal-Arroyo has fired her Foreign Minister, Teofisto Guingona (who continues as Vice President, an elected post), due to his opposition to the U.S. military expansion in the country. Arroyo announced that she will serve as her own Foreign Minister, to "chart a closer partnership with the U.S. war on terrorism."

The new plan is to launch at least three separate "exercises," one in the main northern island of Luzon, one in the central Visayas Islands, and one in Mindanao in the South, all to begin in October. The government is committed to granting the U.S. "logistics facilities" in the country—a measure just short of the "basing rights" outlawed by the Constitution—and the multiple deployments provide justification for setting up essentially permanent U.S. structures across the country.

U.S. Special Forces joint deployments on combat missions with Philippines troops are now approved, and are expected to begin immediately. While this leaves only the rest of July on this mission (since the current Balikatan Exercise officially ends July 31), a military provocation of some sort could easily take place in that time frame, which could be used to justify an extension.

Indonesia Reopens Strategic Economic Projects

Indonesia is re-launching 14 strategic chemical and power projects which had been closed in the 1997-98 crisis. As noted in the release from the Ministry of Economic Affairs, the re-opening is only due to the fact that the original contracts have been renegotiated.

The original sweetheart contracts, signed in the hot-money years of the mid-1990s with the Suharto regime, priced the output in dollars, forced the government to buy the entire output even if it were not needed, and/or included other conditions which placed all the risk on the government. As the release bluntly states: "The government recognizes that many of these projects were tainted by corruption in the past. This condition is unacceptable...." Indonesia has fought serious legal and political fights over these corrupt contracts, successfully forcing renegotiation in 10, with 10 more under discussion, six cancelled, and one in litigation.

The 14 projects include five fertilizer plants, one petrochemical, seven power plants, and one electricity transmission project. The foreign contractors include Japanese, American, and European firms.

Megawati Tells Military To Crack Down on Separatists

Indonesian President Megawati Soekarnoputri on July 3 instructed military Commander Maj. Gen. Djali Yusuf to deal sternly with the separatist Free Aceh Movement (GAM). in order to maintain stability across the country, including in war-torn Nanggroe Aceh Darussalam (The province formerly known simply as Aceh).

In a series of recent attacks, GAM rebels have been accused of abducting nine crew members of a boat hired by oil and gas company ExxonMobil Indonesia to carry supplies to its offshore oil exploration field, and have kidnapped nine athletes and officers in Aceh Sigli after they had participated in a provincial sporting event. (All the kidnap victims were released by the GAM on July 5, in an apparent effort to prevent a military crackdown.) Rebels have also toppled some 21 electricity towers in eastern Aceh, causing widespread blackouts in the area.

Yusuf said that he had already deployed his Rajawali unit to restore security in East Aceh.

Laos: World Bank Stops Crucial Hydroelectric Project

As of July 4, the World Bank has sabotaged a crucial dam project in Laos "until it receives wider support among the international donor community and from social and environmental groups." World Bank project director Jayasankar Shivakumar said the Bank will not extend a partial-risk guarantee to the Nam Theun 2 hydroelectric project, which the impoverished country critically needs to generate electricty for its own development and to sell to Thailand. The $100-million investment cost may not be forthcoming without the guarantee, to the delight of the greenies and those who are still fighting the Vietnam War. The U.S. Congress has yet to grant normal trade relations to the landlocked country, which suffered more sustained bombing than any country in history, during the Indochina war.

UN Still Preventing Cambodia Trial of Khmer Rouge

The United Nations has rejected Cambodia's offer to change its laws to accommodate UN conditions on the proposed trial of the Khmer Rouge. Despite calls for the UN to work with Cambodia from nearly every member nation at the UN, including the United States, the UN has again chosen to reject discussions concerning any trial which is not strictly under its control. This refusal can only convince the world that the UN is terrified that its own criminal role in sponsoring the Khmer Rouge as the legitimate representative of Cambodia from 1979 to 1992, will come out in any trial that is even partially open to the truth.

India Cabinet Shuffle Could Change Financial Direction

Indian Prime Minister Atal Behari Vajpayee has carried out a much-awaited Cabinet shuffle, originally scheduled to take place in May, but delayed by the India-Pakistan military crisis. L.K. Advani, the Bharatiya Janata Party number two and Interior Minister, has been named Deputy Prime Minister. Although it is a mere formalization of the position he already had, it means that the process to prepare for the next general elections under Advani (Vajpayee long ago announced that he would retire after this term), has begun. There are other indications to suggest the same, including positioning people in the key slots of the BJP hierarchy to balance the geographical representation at the higher levels.

In addition, External Affairs Minister Jaswant Singh and Finance Minister Yashwant Sinha have switched their jobs. Jaswant Singh had earlier wanted the finance portfolio, but was blocked by the RSS, which said Jaswant Singh was too close to Washington. Yashwant Sinha, a former bureaucrat and a former finance minister with Chandrashekhar, was reluctantly accepted by Vajpayee, and the RSS. From day one, Vajpayee was looking for a substitute. It seems he has now found enough RSS support to appoint Jaswant Singh. It may mean that in the coming days, some serious changes could be made in India's financial policies. What is important, however, is that Vajpayee will be working in tandem with Jaswant Singh on the economic matters. He did not do so with Sinha and kept him out of his inner circle.

Since George Fernandes continues as Defense Minister (Fernandes is very close to Jaswant Singh), the economic, defense, and foreign policy will be run by the PMO with the help of Jaswant Singh and Fernandes. It is likely that the shuffle iced out Yashwant Sinha. It will be interesting to see what the IMF-World Bank reaction will be, since Sinha was a favorite of the financial giants.

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